On December 14, 2017, Senator Ron Wyden sent a letter to the US Treasury Department’s Financial Crimes Enforcement Network to inquire about its oversight and regulation of cryptocurrency transactions.

“I believe that we should look to support financial innovation, but that we should ensure new technology companies comply with existing laws,” wrote Senator Ron Wyden (OR-D) in a letter to the Financial Crimes Enforcement Network (FinCEN) on Thursday.

The Senator worries that digital currency “could be laundered through trades that occur outside the regulatory framework that applies to current financial transactions.” Concerns about tax evasion through virtual currency have become more pronounced as the prices of cryptocurrencies have dramatically risen this year.

In his letter, Senator Wyden asked about FinCEN’s “authority and capabilities” with regard to identifying cryptocurrency users and the unit’s capacity to “trace and seize” digital assets.

In March 2013, FinCEN released guidance to explain that its “rules define certain businesses or individuals as money services businesses (MSBs) depending on the nature of their financial activities.” Virtual currency users, however, are not MSBs, so they are not subject to registration, reporting, and recordkeeping regulations.

Recently, in July 2017, FinCEN assessed a $110 million civil penalty against digital currency trading platform BTC-e for “willfully violating U.S. anti-money laundering (AML) laws.” In a related matter, ETHNews reported yesterday on the Greek Supreme Court’s approval of the US extradition request for alleged BTC-e operator Alexander Vinnik. The request was notably challenged by Vinnik, who would prefer a return to his native Russia where he might face lesser charges.

Last month, ETHNews also reported that the IRS’ petition to enforce its summons on Coinbase was granted in part and denied in part by Judge Jacqueline Scott Corley – the IRS, like FinCEN, is a bureau of the Treasury Department. The order directed Coinbase to produce specified documents for customer accounts that completed any one transactiontype (buy, sell, send, or receive) for at least the equivalent of $20,000 between 2013 to 2015.

Furthermore, in August, ETHNews brought to light a series of partnershipsbetween Chainalysis and US government agencies, including the Internal Revenue Service. It’s unclear whether Senator Wyden was aware of these contractsor the Coinbase case.

ETHNews reached out to Senator Wyden’s Washington, DC, office for comment but has yet to receive a response. We are also working to acquire a copy of his letter in full.

Senator Wyden’s letter reportedly included concerns about FinCEN’s regulation of token offerings (ICOs), so it’s not apparent how familiar he is with the virtual currency landscape. Readers of ETHNews would know that token offerings have primarily come under scrutiny from the US Securities and Exchange Commission.

Earlier this week, SEC chairman Jay Clayton released a statement directed to “Main Street” investors and market professionals regarding his general views on cryptocurrency and the market for token offerings. This came just hours after the Commission filed a cease-and-desist order against Munchee, a token offering for a restaurant review application.

source: ETHNews